Los Angeles-based grower financer ProducePay has expanded to South America.

"We"re doing our first lemons out of Chile," CEO Pablo Borquez Schwarzbeck said Sept. 15. "That"s the official start of our South America presence, but it"s definitely not the end. Our focus for the fall is on plantains and blueberries."

ProducePay is financing about 40% of the U.S. market value of the crops, money that South American growers receive when their shipments leave port.

"Our goal is to provide a lifeline that a lot of growers need to feel comfortable sending their product to the U.S.," Borquez Schwarzbeck said. "It"s a lot of risk and once it leaves port there"s no coming back."

"Growers worry about who is receiving the product," he said. "‘Do I know them?" they ask. ‘What if they don"t pay me?" That stops a lot of trade that could otherwise happen."

Services for South America are similar to what ProducePay offers in North America.

"We"re telling them that not only are we partnering with you, the farmer, but we know the receiver," he said. "We"ve vetted them and we"re happy to take the risk with you."

For exporters, ProducePay"s status as a U.S. company enables it to facilitate collection if problems or disputes arise. For importers, Borquez Schwarzbeck said the service removes worries about advancing money to growers they"re unfamiliar with.

"ProducePay helps fill that gap by eliminating financial risk and capital outflow, which in turn boosts their ability to source produce from South America," he said.

"There is a lot of trust involved when a grower ships product, particularly in newer relationships," he said. "The chance they will be left on the losing side of a transaction is high. So by allowing them to monetize a significant part of the shipment upon departure, we"re doing a basic job of financial services companies. We"re facilitating trade by providing guarantees as well as additional resources."

 
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